Spain's Endesa confirms outlook after 15% profit increase

Endesa Confirms 2024 Outlook After 15% Surge in Net Profit and Increased Investments

Endesa’s Financial Performance and Strategic Developments in 2024

By Pietro Lombardi

Strong Earnings Growth and Profit Guidance

MADRID, Oct 28 (Reuters) - Spanish power utility Endesa on Wednesday confirmed its full-year profit guidance after growing earnings at its network business supported a roughly 15% increase in net profit for the first nine months.

Net Profit Highlights

• Net profit for the period reached €1.96 billion ($2.18 billion), up from €1.71 billion in the same period last year.

Focus on Power Grids and Investment Increase

• The company, owned by Italian energy giant Enel, has increased its focus on power grids in recent years as a growing electrification of the economy calls for strengthening power networks, which offers companies regulated and stable returns.

• To this end, Endesa has increased investments in grids by 42% in the period, to some €900 million, with overall investments up 19% so far this year.

Market Drivers and Regulatory Developments

Data Centres and Regulation

• The company sees data centres as a key driver of demand growth and calls for "a more proportionate regulation" than the one the Spanish government recently unveiled.

Adjusted Profit and Strategic Planning

• Adjusted profit, which the company uses for its guidance and dividends, rose more than 22% to €2.13 billion, on track to achieve its target of more than €2.4 billion this year despite what it sees as "more demanding market conditions" in the fourth quarter.

• Endesa said it will update its strategic plan in February.

Arbitration Process and LNG Contract

Arbitration Timeline and Claims

• The company now expects the conclusion of an arbitration process related to a price review of a long-term liquefied natural gas (LNG) supply contract by the second quarter of next year, later than it initially foresaw.

Potential Financial Impact

• It faces claims of $218 million but warned that the amount could change during the arbitration, launched in January 2025 by an unidentified LNG producer.

($1 = 0.8981 euros)

(Reporting by Pietro Lombardi; Editing by David Latona)